A Firm's Equity Beta Is 1

question 51

Multiple Choice

A firm's equity beta is 1.2 and its debt is risk free. Given a 0.7 debt to equity ratio, what is the firm's asset beta? (Assume no taxes.)

• A)0.7
• B)1.0
• C)1.2
• D)0.0

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Definitions:

Sacco and Vanzetti Case

was a controversial legal case in the early 20th century United States, where Nicola Sacco and Bartolomeo Vanzetti, Italian-born American anarchists, were tried and executed for robbery and murder, a trial widely regarded as flawed and motivated by political bias.

Political Biases

The tendency to favor or support particular political parties, ideologies, or candidates based on personal preferences rather than objective evidence.

Ethnic Biases

Involves prejudice or favoritism towards certain ethnic groups over others, often resulting in discrimination or social inequality.

Domestic Technology

Technology and appliances designed for use in the home to improve living conditions and reduce household labor, such as kitchen appliances, cleaning devices, and home entertainment systems.